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Lawsuits, auctions and an estate that still isn’t wound up a decade after his passing – these are not topics that anyone could have predicted would be linked to Nelson Mandela.
The South African media is currently abuzz with the news of the anticipated auctioning of our ex-statesman’s possessions. These include Mandela’s first identity document from after the 1994 elections, his hearing aids, his walking stick and numerous items of his clothing. The auction, to be held by his daughter, was set to take place this month but was recently halted. This is all taking place after a two-year court battle.
The auction house estimated the collective value of the 70 lots to be between $2 million and $3 million (R57 million).
READ: Zoleka Mandela may be exhumed, reburied next to her grandmother, Winnie
Over and above the recent auction drama, which has caused quite a rift in the Mandela family, eNCA has reported that there are still many issues that seem to be surfacing after 10 years, and our beloved Madiba’s estate has still not been wound up.
Though his last will and testament is clear about how his estate should be distributed, there seem to be shortfalls in the estate, which has become public knowledge due to the recently reported run down state of the Houghton property in Johannesburg and its unpaid utility bills.
The tale of the Mandela estate is not uncommon to anyone who knows the estates industry. We have firsthand experience with the nightmare that can unfold when a family is not in agreement over an estate or if there is a shortfall in it.
At Capital Legacy, we are big on the basics. Namely, ensuring that you know what an estate is, how to ensure that there is enough money in the estate and how to make sure that it’s managed and distributed the way you intended, when you are no longer around.
What is an estate?
An estate is the assets and liabilities left by you when you die.
What is estate planning?
Estate planning is the arrangement for the distribution and management of your estate at death. The process includes life insurance policies, bank accounts, personal assets and ongoing debts, such as loans and mortgages.
Why is estate planning important?
Many people don’t plan for, and aren’t even aware of, all the unexpected legal fees and costs at death. A few examples would be fees for an executor, a conveyancing attorney, the Master of the Court, correspondence and a testamentary trust, as well as for other immediate expenses such as travel and household. Depending on your estate, these bills can rack up hundreds of thousands of rands.
Let’s put it into perspective:
Executor fees
The industry standard fee charged by the executor or assisting professional to wind up your estate will be a maximum of 3.5% + VAT of the value of your estate. For example, an estate worth R3 million will pay approximately R120 750 in fees.
Conveyancing attorney fees
This is the fee charged by the conveyancing attorney when property needs to be transferred. Fees are calculated on a sliding scale, depending on the value of your house as determined by an assessor. A house worth R1 850 000, for transfer to a beneficiary, could cost the estate R30 544 in fees.
Testamentary trust fees
This is the fee charged by the trustees to administer the trust you create in terms of your will, usually to look after the money you leave to your minor children. On average, 1.15% of the net asset value is charged to establish the trust, and 1.6% is charged annually for the administration of the trust.
Hefty, right? We know
Without a will or proper estate planning, you could leave your family with a mess. As can be seen in the Mandela case, even with a valid will in place, other issues can arise and family feuds can take place. Don’t leave your family as part of the statistic of South Africans who are in debt after a loved one passes away.
Let us assist you with drafting your will and creating a safety net for your family with our Legacy Protection Plan, which can cover all the above-mentioned fees.
To get your will drafted today or for more information on our estate administration services, visit our website at www.capitallegacy.co.za or speak to your financial advisor.
